Undercapitalized Bank List Grows

The number of smaller community banks that are undercapitalized per regulatory guidelines is growing, as new data is beginning to identify institutions too small or too weak to receive government bailout assistance.

The number of banks considered undercapitalized per regulatory guidelines rose to 45 as of Dec. 31 from 38 in September, according to Highline Financial. While that might not seem like a significant increase for this environment, there were 12 bank or thrift failures in the fourth quarter alone.

The Treasury Department's investments through its $700 billion Troubled Asset Relief Program, or TARP, thus far have mostly gone to very large holding companies like JPMorgan Chase (JPM), Bank of America (BAC) and Citigroup (C) or to community banks determined to be in decent shape.

Two of the banks on our preliminary list of 45 undercapitalized banks as of Dec. 31, have already failed. State regulators closed Bank of Clark County of Vancouver, Wash. on Jan. 16. The Office of the Comptroller of the Currency shut down Ocala National Bank of Ocala, Fla. on Jan. 30.

The table below lists all the remaining banks that were undercapitalized as of Dec. 31 that we know of, save one that only operates as a trust bank, with no deposits or loans, and a very small Texas bank that is just a "shell" at this point, with no deposits, no loans and hardly any assets, since the bank charter is being transferred.

Please keep the following in mind:

The list is based on preliminary data: Most banks have filed their call reports, which our data provider, Highline Financial, obtains from the FDIC. The data was not yet finalized when we downloaded it on Feb. 5, and there were at least 100 banks that had not filed yet. This data is often updated by banks before it is finalized.